True interpretation

A client trading company operates a small manufacturing operation. A former employee of that client company from several years ago (who left on good terms) recently started in business on his own account as a sole trader manufacturing a component that our client uses. Our client is happy to outsource that particular aspect of his manufacturing operation to that former employee's sole trader business and went as far as lending him approximately £20 000 on an 'interest-free' basis in order that the sole trader could acquire certain items of plant and machinery which would improve the efficiency and quality of the work being undertaken for the client trading company.
The former employee's sole trader business has a number of other customers and that together with the other terms of the engagement are such that we are comfortable that there is no question that the former employee...